A lot has been made in the press about President-elect Barack Obama's growing Cabinet of rivals, but often overlooked in that discussion is the battle already brewing between Timothy Geithner, nominee for treasury secretary, and current Federal Deposit Insurance Corp. Chairman Sheila Bair, who is expected to keep her job after the transition.
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As the current president of the Federal Reserve Bank of New York, Geithner has
reportedly butted heads with Bair as the two worked with current Treasury Secretary Hank Paulson
to fashion solutions to one financial crisis after another this year,
according to a Bloomberg
report.
The news service speculates that Bair's disagreements with Geithner
and other regulators on the bailout of Citigroup Inc. last month might
prompt Geithner to have her pushed out when Obama takes over. Bloomberg
cites Geithner as reportedly saying that "Bair isn't a team player and is too
focused on protecting her agency rather than the financial system as a
whole," according to two congressional officials and a person familiar
with his thinking.
But removing Bair may not be all that easy, as the FDIC chief has won
fans on Capitol Hill with her plan to restructure mortgages for
homeowners. Among those who think highly of her plan are powerful
committee heads including Senate Banking Committee Chairman Christopher
Dodd and his House of Representatives counterpart Barney Frank. Added to that, Bair has been taking a conciliatory approach.
Additionally, Bair recently told Fortune magazine that she has no qualms with Geithner and looks forward to working with him and the rest of Obama's economic team. Her statements to Fortune put into question either the veracity of the Bloomberg report on Geithner's thinking, or Bair's sincerity to Fortune. -
George
White
See Bloomberg story
See all Transition 2009 Dealscape postsSee video of Bair interview with Fortune
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